How do carry trades work as a hedging technique in multi-currency portfolios?
Welcome!
This community is for professionals and enthusiasts of our products and services.
Share and discuss the best content and new marketing ideas, build your professional profile and become a better marketer together.
This question has been flagged
2
Replies
19
Views
Carry trades function as a hedging technique in multi-currency portfolios by borrowing in low-interest currencies and investing in high-interest ones, helping to offset potential losses from currency fluctuations while diversifying exposure and enhancing returns.
Carry trades hedge multi-currency portfolios by borrowing in low-interest-rate currencies and investing in high-interest-rate currencies, profiting from the interest rate differential and offsetting potential losses in other currencies.